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Lake Tahoe Mortgage Rate Trends- March 31, 2015

Tuesday’s bond market has opened relatively flat despite stronger than expected economic news. The stock markets are showing sizable losses, erasing a good part of yesterday’s rally. The Dow is currently down 81 points while the Nasdaq has fallen 18 points. The bond market is currently up 2/32 (1.94%), which should keep this morning’s mortgage rates at yesterday’s levels.

March’s Consumer Confidence Index (CCI) was the sole relevant economic release of the day. It came from the Conference Board at 10:00 AM ET, who is a business research group and not a governmental agency. They announced a reading of 101.3 that greatly exceeded forecasts of 96.2. An upward revision to February’s reading has softened the surprise, but it still shows that consumers felt better about their own financial and employment situations this month than many had thought. That makes the data bad news for the bond and mortgage markets because rising confidence usually means consumers are willing to spend more money, fueling economic growth.

Tomorrow has two reports set to be posted with both having the potential to cause movement in mortgage rates. The first will be the ADP Employment report at 8:15 AM ET. This report tracks changes in private-sector jobs of ADP’s clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that usually follows a couple days later. Still, because we could see at least a moderate reaction to the results, we will be watching it. Analysts are expecting it to show that 225,000 new payrolls were added. The lower the number of jobs, the better the news it is for mortgage rates.

The second report of the day is actually one of the week’s two highly important ones. The Institute for Supply Management (ISM) will release their manufacturing index at 10:00 AM ET. This index gives us an important measurement of manufacturer sentiment by surveying manufacturing executives. It is the first piece of data that we see each month that covers the preceding month. In other words, it is the freshest economic data each month. A reading above 50 means more surveyed executives felt business improved during the month than those who said it had worsened. This month’s report is expected to show a reading of 52.5, which would be a decline from February’s reading of 52.9. This means that analysts think business sentiment slipped from last month’s level. That would be relatively good news for the bond market and mortgage rates, although a noticeable decline would be better for rates. The higher the reading, the worse news it is for bonds and mortgage rates.

Lake Tahoe Mortgage Rate Trends- March 30, 2015

Monday’s bond market has opened in positive territory despite huge gains in stocks. The major stock indexes are in rally mode early this morning with the Dow up 267 points and the Nasdaq up 38 points. The bond market is currently up 4/32 (1.94%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

February’s Personal Income & Outlays report kicked off this week’s calendar early this morning. It showed that personal income rose 0.4% and that spending rose 0.1% from January’s levels. The income reading exceeded forecasts slightly but the spending fell short by the same 0.1% margin. Rising income is bad news for bonds because it means consumers have more money to spend. However, the softer than expected spending reading indicates that despite the rise in income, consumers spent less than many had thought. The two readings more or less negate each other in terms of impact on this morning’s mortgage rates.

Tomorrow’s only relevant report is March’s Consumer Confidence Index (CCI) from the New York-based Conference Board at 10:00 AM ET. This index gives us an indication of consumers’ willingness to spend. Bond traders watch this data closely because consumer spending makes up over two-thirds of our economy. If this report shows that confidence in their own financial situations is falling, it would indicate that consumers are less apt to make a large purchase in the near future. If it reveals that confidence looks to be growing, we may see bond traders sell as economic growth may rise. That would likely lead to slightly higher mortgage rates tomorrow morning. It is expected to show a reading of 96.2 down slightly from February’s 96.4 reading. The lower the reading, the better the news it is for bonds and mortgage pricing.

Overall, Friday is the biggest day of the week due to the significance of the monthly Employment report but I suspect we will have an active day in mortgage rates Wednesday also with the ISM index being posted. Adding to the importance of Friday’s data is the fact that the bond market will be open only until noon in recognition of the Good Friday holiday while the stock markets will be closed the entire day. It surely will be an interesting day to cap off the week. I strongly recommend maintaining contact with your mortgage professional this week if still floating an interest rate and closing in the near future.

Lake Tahoe Mortgage Rate Trends- March 29, 2015

This week brings us the release of six economic reports that have the potential to move mortgage rates with two of them considered to be highly important to the markets. The first is February’s Personal Income & Outlays report early tomorrow morning. This data helps us measure consumers’ ability to spend and current spending habits, which is important to the mortgage market because of the influence that consumer spending related information has on the financial markets. If a consumers’ income is rising, they are more likely to make additional purchases in the near future. This raises inflation concerns, adds fuel for economic growth and has a negative effect on the bond market and mortgage rates. Current forecasts are calling for a 0.3% increase in income and a 0.2% rise in spending. Smaller than expected increases would be good news for bonds and mortgage shoppers.

Tuesday also has only one report worth watching. This will come from the New York-based Conference Board at 10:00 AM ET when they post their Consumer Confidence Index (CCI) for March. This index gives us an indication of consumers’ willingness to spend. Bond traders watch this data closely because consumer spending makes up over two-thirds of our economy. If this report shows that confidence in their own financial situations is falling, it would indicate that consumers are less apt to make a large purchase in the near future. If it reveals that confidence looks to be growing, we may see bond traders sell as economic growth may rise, pushing mortgage rates higher Tuesday morning. It is expected to show a reading of 96.2 down slightly from February’s 96.4 reading. The lower the reading, the better the news it is for bonds and mortgage rates.

The ADP Employment report is set for release early Wednesday morning, which has the potential to cause some movement in the markets if it shows much stronger or weaker numbers. This report tracks changes in private-sector jobs of ADP’s clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that usually follows a couple days later. Still, because we could see at least a moderate reaction to the results, we will be watching it. Analysts are expecting it to show that 228,000 new payrolls were added. The lower the number of jobs, the better the news it is for mortgage rates.

Wednesday’s second report is actually one of those highly important ones and comes at 10:00 AM ET. That is when the Institute for Supply Management (ISM) will release their manufacturing index. This index gives us an important measurement of manufacturer sentiment by surveying manufacturing executives. It is the first piece of data that we see each month that covers the preceding month. In other words, it is the freshest economic data each month. A reading above 50 means more surveyed executives felt business improved during the month than those who said it had worsened. This month’s report is expected to show a reading of 52.5, which would be a decline from February’s reading of 52.9. This means that analysts think business sentiment slipped from last month’s level. That would be relatively good news for the bond market and mortgage rates, although a noticeable decline would be better for rates. The higher the reading, the worse news it is for bonds and mortgage rates.

February’s Factory Orders will be released late Thursday morning. This data is similar to last week’s Durable Goods Orders report, except it includes orders for both durable and non-durable goods, giving us another measurement of manufacturing sector strength. It is considered to be only moderately important to the bond and mortgage markets, so unless it varies greatly from forecasts of a 0.5% decline, I suspect that the data will have a minimal impact on Thursday’s mortgage rates.

The biggest news of the week will come early Friday morning when the Labor Department posts March’s Employment report, revealing the U.S. unemployment rate and the number of jobs added or lost during the month. This is an extremely important report to the financial and mortgage markets. It is expected to show that the unemployment rate remained at 5.5% and that approximately 248,000 payrolls were added to the economy during the month. A higher unemployment rate and a much smaller than expected payroll number would be good news for bonds and could likely push mortgage rates lower Friday morning because it would indicate weaker than thought conditions in the employment sector of the economy.

Overall, Friday is the biggest day of the week due to the significance of the Employment report but I suspect we will have an active day in mortgage rates Wednesday also. Adding to the importance of Friday’s data is the fact that the bond market will be open only until noon in recognition of the Good Friday holiday while the stock markets will be closed the entire day. It surely will be an interesting day to cap off the week. I strongly recommend maintaining contact with your mortgage professional this week if still floating an interest rate and closing in the near future.

Lake Tahoe Mortgage Rate Trends- March 27, 2015

Friday’s bond market has opened in positive territory following mixed economic data. The major stock indexes are showing minor gains with the Dow up 28 points and the Nasdaq up 16 points. The bond market is currently up 8/32 (1.97%), but due to weakness late yesterday we likely will see little change in this morning’s mortgage rates.

We again saw afternoon selling in bonds yesterday that caused many lenders to make upward intra-day revisions to mortgage rates. A contributing factor to yesterday’s action was a weak 7-year Treasury Note auction that followed a poor 5-year Note sale Wednesday. Both sales indicated a lackluster investor interest in the securities that spilled over to the broader bond market after results were posted at 1:00 PM ET. If your lender did revise their rates higher late yesterday, you should see an improvement of approximately the same amount in this morning’s pricing. If your lender did not adjust for the move yesterday, you should see little change in this morning’s rates.

The first of today’s two relevant economic reports was the 2nd revision to the 4th Quarter Gross Domestic Product (GDP) at 8:30 AM ET. It came in at a 2.2% annual rate of growth during the quarter that matched the first revision. Analysts were expecting to see an upward revision, indicating that the economy was actually a little stronger during the last three months of last year than previously thought. The softer reading is technically good news for bonds and mortgage rates, but since this data is quite aged at this point, its impact on today’s rates has actually been fairly minimal.

Also posted this morning was the University of Michigan’s revised March Consumer Sentiment Index just before 10:00 AM ET. It showed a reading of 93.0 that exceeded forecasts and was higher than the preliminary reading of 91.2. This means surveyed consumers felt better about their own financial and employment situations than many had expected. Because rising confidence usually translates into stronger levels of consumer spending that fuels economic growth, we should consider this reading bad news for mortgage rates.

Next week brings us plenty of economic data for the markets to digest, including a couple of key reports. One of those being the almighty monthly Employment report. There is relevant data scheduled for release Monday when February’s Personal Income and Outlays report is posted. Look for details on it and the rest of the week’s schedule in Sunday evening’s weekly preview.

Lake Tahoe Mortgage Rate Trends- March 26, 2015

Thursday’s bond market has opened in negative territory, extending yesterday’s afternoon weakness. Stocks are following suit with the Dow down 92 points and the Nasdaq down 35 points. The bond market is currently down 13/32 (1.97%), which with yesterday’s afternoon selling should push this morning’s mortgage rates higher by approximately .250 of a discount point if comparing to Wednesday’s morning pricing.

Yesterday’s afternoon weakness in bond trading can partly be attributed to a weak 5-year Treasury Note auction. Many of the benchmarks we use to gauge investor demand showed a lackluster interest in the securities. Bonds were already down from morning levels but extended that downward move after results of the sale were posted at 1:00 PM ET. That doesn’t give us too much to be optimistic about in today’s sale of 7-year Notes. If we see a similar level of demand in this sale, we can expect to see more weakness in bonds later this afternoon, possibly reaching mortgage rates. Results will be posted at 1:00 PM ET again today, so any reaction will likely come during early afternoon trading.

Today’s only relevant economic data was last week’s unemployment figures at 8:30 AM ET. They revealed that 282,000 new claims for unemployment benefits were filed last week, down from the previous week’s 291,000. That indicates that the employment sector strengthened last week, making the data negative for bonds and mortgage rates. However, this morning’s bond selling is more a result of several factors combined than it is of this report. This was only a weekly snapshot and was not enough of a variance to cause this much movement in bonds.

Tomorrow has two pieces of data scheduled for release. The first of them comes at 8:30 AM ET when the 2nd revision to the 4th Quarter GDP will be posted. This is the second and final revision to January’s preliminary reading of the U.S. Gross Domestic Product, or the sum of all goods and services produced in the U.S. The GDP is the benchmark measurement of economic activity. It is expected to show that the economy grew at an annual pace of 2.4% last quarter, up from the previous estimate of 2.2% that was released last month. Analysts are now more concerned with next month’s preliminary reading of the 1st quarter than data from three to six months ago, so I don’t expect this report to affect mortgage rates much unless it shows a wide variance from forecasts.

The final report of the week will be the University of Michigan’s revised March Consumer Sentiment Index just before 10:00 AM ET. This will give us another indication of consumer confidence, which hints at consumers’ willingness to spend. Rising confidence is considered bad news for the bond market and mortgage pricing because it usually means consumers are more willing to spend. Tomorrow’s report is expected to show a reading of 92.0, up from the preliminary reading of 91.2. Favorable results for bonds and mortgage rates would be a sizable decline in confidence.

Lake Tahoe Mortgage Rate Trends- March 25, 2015

Wednesday’s bond market initially opened in positive territory but has since slipped into negative ground despite favorable economic news. The stock markets are showing relatively minor losses during early trading with the Dow down 35 points and the Nasdaq down 21 points. The bond market is currently down 3/32 (1.88%), but due to strength late yesterday we may still see a slight improvement in this morning’s mortgage rates.

February’s Durable Goods Orders report was posted at 8:30 AM ET this morning. The Commerce Department announced a 1.4% decline in new orders for big-ticket products. Because analysts were expecting a small increase, we can consider the data favorable for bonds and mortgage pricing. However, since this data is known to be quite volatile from month to month, today’s variance was not actually as significant as it may appear to be. That has limited its impact on today’s rates.

Also today is the first of this week’s two Treasury auctions that have the potential to affect mortgage rates. 5-year Notes are being sold today while 7-year Notes will be auctioned tomorrow. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. However, strong sales usually make bonds more attractive to investors and bring more funds into the bond market. The buying of bonds that follows often translates into lower mortgage rates. Results of today’s sale will be posted at 1:00 PM ET, so if there is a reaction it will come during early afternoon trading.

The only economic data set for release tomorrow is last week’s unemployment figures at 8:30 AM ET. They are expected to show that 290,000 new claims for unemployment benefits were filed last week. This would be a slight change from the previous week’s 291,000 initial claims, indicating little change in the employment sector last week. Because rising claims hint at a weakening labor market, the higher the number of new claims the better the news it is for bonds and mortgage rates.

Lake Tahoe Mortgage Rate Trends- March 24, 2015

Tuesday’s bond market has opened down slightly following stronger than anticipated economic news. The stock markets are mixed but fairly calm with the Dow down 3 points and the Nasdaq up 12 points. The bond market is currently down 1/32 (1.91%), which should keep this morning’s mortgage rates close to yesterday’s levels.

There were two pieces of economic data posted this morning. The first was February’s Consumer Price Index (CPI) at 8:30 AM ET. It showed a 0.2% increase in both the overall and core readings. The overall matched forecasts but the more important core reading that excludes volatile food and energy prices was stronger than the 0.1% that was expected. Because higher levels of inflation make long-term securities such as mortgage-related bonds less attractive to investors, we can consider this report slightly negative for bonds and mortgage rates.

The Commerce Department gave us February’s New Home Sales figures at 10:00 AM ET. They announced that sales of newly constructed homes rose 7.8% last month, greatly exceeding forecasts and reaching a 7-year high. Analysts were expecting to see a decline in sales, indicating weakness in the sector. However, this data points towards strength in the sector, making it bad news for the bond market and mortgage rates.

Tomorrow’s only relevant economic data is February’s Durable Goods Orders at 8:30 AM ET, but it is the week’s most important release. This Commerce Department report gives us a measurement of manufacturing sector strength by tracking new orders for big-ticket items, or products that are expected to last three or more years such as electronics, appliances and airplanes. This data is known to be volatile from month to month but is still considered to be of fairly high importance to the markets. Analysts are expecting it to show an increase in new orders of approximately 0.4%. A much larger increase would be considered negative for bonds as it would indicate economic strength and could lead to higher mortgage rates tomorrow morning. Since these orders are volatile, it will take a wider variance from forecasts for it to move mortgage rates than other data requires.

Also tomorrow is the first of this week’s two Treasury auctions that have the potential to affect mortgage rates. 5-year Notes will be sold tomorrow while 7-year Notes go Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. However, strong sales usually make bonds more attractive to investors and bring more funds into the bond market. The buying of bonds that follows often translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET auction day, so look for any reaction to come during afternoon hours.

Lake Tahoe Mortgage Rate Trends- March 23, 2015

Monday’s bond market has opened the week in positive territory. The stock markets are doing the same with the Dow up 53 points and the Nasdaq up 1 point. The bond market is currently up 3/32 (1.92%), which should improve this morning’s mortgage rates by approximately .125 of a discount point if comparing to Friday’s morning pricing.

Today’s only economic data came from the National Association of Realtors, who announced that sales of existing homes rose 1.2% last month. This was close to expectations and hasn’t had much of an impact on today’s bond trading or mortgage pricing. Generally speaking, housing sector strength is negative news for bonds and mortgage rates, but this was not enough of a variance from forecasts to influence this morning’s rates.

February’s Consumer Price Index (CPI) will be released at 8:30 AM ET tomorrow, which measures inflationary pressures at the very important consumer level of the economy. Its results are watched closely by bond market traders and analysts because rising inflation makes long-term securities such as mortgage-related bonds less appealing to investors and may alter the Fed’s timeline for raising short-term rates. It is expected to show a 0.2% increase in the overall index and a 0.1% rise in the more important core data that excludes more volatile food and energy prices. If we see weaker than expected readings like we did in its’ sister release Producer Price Index (PPI), bond prices should rise and mortgage rates will likely fall early tomorrow.

Also tomorrow morning, the Commerce Department will give us February’s New Home Sales figures. They are expected to announce a decline in sales of newly constructed homes. This report tracks a much smaller percentage of home sales than Monday’s Existing Home Sales report covered, so it should have a much weaker influence on the markets and mortgage pricing. A large increase in sales would be negative for the bond market and mortgage pricing because it would point towards economic strength.

Overall, I believe tomorrow will be the most active day for mortgage rates this week with multiple reports but Wednesday’s sole report is arguably the most important of the week so it could be an active day also. I am expecting to see a much calmer week for rates this week than we saw last week. Still, with events set for each day, we still could see movement in rates for the week. Accordingly, please maintain contact with your mortgage professional if still floating an interest rate.

Lake Tahoe Mortgage Rate Trends- March 22, 2015

This week brings us the release of six pieces of relevant economic data along with two Treasury auctions that have the potential to affect mortgage rates. Most of the reports can influence mortgage rates but none of them are considered extremely important or key data.

The first will come late tomorrow morning when February’s Existing Home Sales report is posted by the National Association of Realtors. It will give us a measurement of housing sector strength and mortgage credit demand. It is expected to reveal an increase in home resales, meaning the housing sector improved last month. Ideally, bond traders would prefer to see a decline in sales, pointing towards a weakening housing sector. Bad news would be a sizable increase in sales, indicating that the housing sector is gaining momentum. That could be troublesome for the bond market and mortgage rates because housing strength makes broader economic growth more likely.

February’s Consumer Price Index (CPI) will be released at 8:30 AM ET Tuesday, which measures inflationary pressures at the very important consumer level of the economy. Its results are watched closely by bond market traders and analysts because rising inflation makes long-term securities such as mortgage-related bonds less appealing to investors and may alter the Fed’s timeline for raising short-term rates. It is expected to show a 0.2% increase in the overall index and a 0.1% rise in the more important core data that excludes more volatile food and energy prices. If we see weaker than expected readings like we did in its’ sister release Producer Price Index (PPI), bond prices should rise and mortgage rates will likely fall early Tuesday.

Also Tuesday morning, the Commerce Department will give us February’s New Home Sales figures. They are expected to announce a decline in sales of newly constructed homes. This report tracks a much smaller percentage of home sales than Monday’s Existing Home Sales report covered, so it should have a much weaker influence on the markets and mortgage pricing. A large increase in sales would be negative for the bond market and mortgage pricing because it would point towards economic strength.

Wednesday’s only economic data is February’s Durable Goods Orders at 8:30 AM ET. This Commerce Department report gives us a measurement of manufacturing sector strength by tracking new orders for big-ticket items, or products that are expected to last three or more years such as electronics, appliances and airplanes. This data is known to be volatile from month to month but is still considered to be of fairly high importance to the markets. Analysts are expecting it to show an increase in new orders of approximately 0.5%. A much larger increase would be considered negative for bonds as it would indicate economic strength and could lead to higher mortgage rates Wednesday morning. Since these orders are volatile, it will take a wider variance from forecasts for it to move mortgage rates than other data requires.

Friday has two pieces of data scheduled that are worth watching. The final revision to the 4th Quarter GDP is first at 8:30 AM ET. This is the second and final revision to January’s preliminary reading of the U.S. Gross Domestic Product, or the sum of all goods and services produced in the U.S. The GDP is the benchmark measurement of economic activity. It is expected to show that the economy grew at an annual pace of 2.4% last quarter, up from the previous estimate of 2.2% that was released last month. Analysts are now more concerned with next month’s preliminary reading of the 1st quarter than data from three to six months ago, so I don’t expect this report to affect mortgage rates much.

The final report of the week comes from the University of Michigan just before 10:00 AM ET Friday. Their revision to their March Consumer Sentiment Index will give us another indication of consumer confidence, which hints at consumers’ willingness to spend. Rising confidence is considered bad news for the bond market and mortgage pricing because it usually means consumers are more willing to spend. Friday’s report is expected to show little change from the preliminary reading of 92.1. Favorable results for bonds and mortgage rates would be a sizable decline in confidence.

In addition to this week’s economic reports, there are two relatively important Treasury auctions that may also influence bond trading enough to affect mortgage rates. There will be an auction of 5-year Notes Wednesday and 7-year Notes on Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. However, strong sales usually make bonds more attractive to investors and bring more funds into the bond market. The buying of bonds that follows often translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET auction day, so look for any reaction to come during afternoon hours.

Overall, I believe Tuesday will be the most active day for mortgage rates with multiple reports but Wednesday’s only data is arguably the most important report of the week so it could be an active day also. I am expecting to see a much calmer week for rates this week than we saw last week. Still, with events set for each day, we still could see movement in rates for the week. Accordingly, please maintain contact with your mortgage professional if still floating an interest rate.

Lake Tahoe Mortgage Rate Trends- March 20, 2015

Friday’s bond market has opened in positive territory despite stock strength and no relevant economic data. The major stock indexes are posting sizable gains during early trading, pushing the Dow higher by 139 points and the Nasdaq up 36 points. The bond market is up 10/32 (1.93%), but due to weakness in trading late yesterday we likely will not see much of a change in this morning’s mortgage rates if comparing to Thursday’s early pricing.

There is nothing of importance scheduled for today. Bonds are moving with stocks instead of against, but I am hesitant to say that stocks moving higher throughout the day means that bonds will follow suit. It could go either way. If stocks do extend this morning’s gains, bonds may do so also or could retreat. I would not be surprised to see some profit-taking in the bond market as the week comes to a close, so watch for a negative move this afternoon if still floating an interest rate.

Next week has a handful of economic reports set to be posted. Some are considered important but none should be considered key pieces that potentially can be market movers. Most of the data is considered to be moderately important with two standing out as more likely to influence the markets and mortgage rates than the others. In addition to the economic reports, there are also a couple of Treasury auctions that may have an impact on bonds and mortgage rates.

Monday does have a piece of relevant data set for release with February’s Existing Home Sales report coming late morning. This is where the National Association of Realtors will release home resale figures from last month. Look for details on it and the rest of the week’s calendar in Sunday evening’s weekly preview.